Tuesday, May 26, 2009

The Need for Turnaround When Smart Companies Do Dumb Things

We see examples of smart companies doing dumb things every day and there are books that have been written about this phenomenon. In fact, business news is full of stories about companies, senior executives, CEOs and Boards of Directors that have done something that from the outside or in hindsight looks to be dumb. In many cases it has required turnaround expertise to bring the company back to profitability and to survive.

Why do we see so much of this in the press?

First, bad news is much more newsworthy than good news so we see a lot of it being reported.

Second, hindsight is 20/20, so those of us who look at the results can see when there have been mistakes.

We need to remember two things

First, if mistakes are not being made by companies, very little learning occurs and the company will ultimately die. No one is right 100% of the time. So companies and senior executives need to be making mistakes (small mistakes) and hopefully learning from them.

Second, in most cases, the people who have led the mistakes didn’t start out to do dumb things. They really thought they had a winning idea.

But what are some of the root causes that turn what was expected to be a winning idea from the outset into a result that gets branded as dumb?

1 Operating without a clear strategic plan. Without the plan, the company is almost guaranteed to have unfocused resources and multi-direction activities. The result will be a number of failures, some that are going to be seen as dumb ideas.

2 Poor communication. Often a plan is devised by the executive group and then not well communicated to the organization. Hence the execution is flawed leading to lack of success.

3 Not heeding changing or changed market conditions. Once a program is underway in development, it generates a momentum all of its own and people/companies are hesitant to make changes, particularly if one has ownership in it. What was a good idea at the start becomes a dumb idea in a changed economy.

4 Insisting on consensus. The old adage is that the camel was designed by committee with a forced consensus. The more people involved, the harder it is to reach a workable solution and once reached, to change it in any way. This is not to recommend that all decisions be made unilaterally, but that a committee decision is viewed carefully.

5 Pride and arrogance getting in the way. It causes decisions to be based on “who is right” not “what is right”.

6 Unrealistic expectations. It is good to dream big dreams. However, realism must come into play and overreaching, overextending resources and over estimating causes disasters.

7 Budgets and budget changes. Often the original proposal has sufficient resources to achieve the result. However often either the resources are cut back for a variety of reasons or there are extensions to the project. Budget shrink and project creep set in and the result is always not good.

How could companies minimize the chances of making dumb mistakes?

1 Develop a clear realistic business strategic plan.

2 Get some expert help from someone who has been there before and has relevant experience

3 Make fact based decisions.

4 Act on what is right not who is right. Just because the CEO says they like it doesn’t necessarily mean it is a great idea. The organization knows their capabilities.

5 Do not force consensus.

6 Communicate, communicate, communicate.

7 Don’t shoot the messenger of bad news. Reward them for coming forward and avoid the huge dumb mistake.

9 When either the project or the budget changes, make the appropriate modifications.

10 Expect mistakes. Learn from each success and failure so that the small dumb mistakes become learning and never become big dumb mistakes.

If you have already made the dumb mistakes and are in trouble get some turnaround help quickly and get back on track. Squash the pride and arrogance and go for positive bottom line results.



John Maver
Maver Management Group
(925) 648-7561
Maver Management

View John Maver's profile on LinkedIn

Tuesday, May 12, 2009

Staying positive in a negative world

We are seeing glimmers of hope in this economic recession. At least, there seems to be a lot of activity in Washington and much better communication. Our hope is that the activity actually is producing progress.

“In the end you are measured not by how much you undertake but by what you finally accomplish.” Donald Trump

While we love the glimmer, the realism is that we have yet to see the repercussions from the bankruptcies of the auto manufacturers and all of their support industries. We still are feeling the hurt from the credit crunch and unemployment continues to rise. Consumer spending has been greatly curtailed. Not only are purchases for the home down, but all the industries associated with travel, eating out or leisure are also hurting. Look at how many restaurants are closed.

As if the economic issues are not bad enough, our traditional “heroes” are being disgraced and seldom stand for good any more. Athletes have drug and alcohol problems, beating their wives, trashing hotel rooms and more. Actors and actresses seem to have forgotten moral values completely. Many reality shows are based on poor values. The “rap sheets” on our political leaders are shameful in so many cases. Not only do we face this in the news every day, we hear it from the politicians themselves.

“Congress is the only business in the world where your colleagues wake up in the morning and try to figure out how to screw over their colleagues.” Rep. Mike Thompson D – St Helena

So how do we stay positive in this negative world?

1 Look for the good in the people around you. The American spirit is alive and well and ready to burst despite the problems. If the people around you are negative, get rid of them and surround yourself with positive people.

2 Look for the real heroes and celebrate them. Look for the men and women returning from military service abroad, or "Sully" Sullenberger, the pilot of the plane landed on the Hudson River and who lives in my hometown. Or the single mother who works hard to raise her kids despite the hardships. Or the struggling business owner who opens his or her doors every day.

3 Look for the positive role models on TV and in the movies and support them and their products. It used to be that all of the spokespeople and characters for products were positive. Search the ones out that remain.

4 Look for someone to help that can’t help themself. You will feel enormously better.

5 Look for a church service to attend. You may not have the same faith that I have but go worship.

6 Call your parents and tell them you love them. They need that reminder even when it isn’t Mother’s day or Father’s day.

7 Smile at people and enjoy the smiles that come in return. You will be amazed at the reactions you will get from this simple act.

8 There was an old psychology nugget that said “if you want to be positive, act positive”. That is good advice.

9 For your business, read the other articles on this site and take some action. These are best practices and can save your business. That will help you feel positive.

10 Contact me and let me help you. I have helped many others through rocky times both personally and in their business.

A leader’s role is to raise people’s aspirations for what they can become and to release their energies so they will try to get there.” David Gergen



John Maver
Maver Management Group
(925) 648-7561
Maver Management

View John Maver's profile on LinkedIn